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A step-by-step guide
A Performance Hub guide By Dr Sue Rudkin, Charities Evaluation Services With research by Agenda Consulting February 2008
Background to this guide This guide was commissioned by the Performance Hub, which is a partnership of leading infrastructure organisations working to help third sector organisations (TSOs) better achieve their missions. TSOs include charities, voluntary organisations, community groups and social enterprises. The Performance Hub The Performance Hub is funded by Capacitybuilders through the ChangeUp programme.
requests from small organisations for permission to reproduce this publication in whole or in part but terms upon which such reproduction may be permitted will remain at CES discretion. Charities Evaluation Services 2008 ISBN 978-0-9555404-3-1 Published by the Performance Hub Edited by Nicky Coward, Charities Evaluation Services Designed by Positive2 Performance Hub 4 Coldbath Square London EC1R 5HL 0800 652 5787 Textphone 0800 01 88 111 (minicom) helpline@performancehub.org.uk www.performancehub.org.uk Agenda Consulting The Jam Factory 27 Park End Street Oxford OX1 1WU www.agendaconsulting.co.uk Charities Evaluation Services 4 Coldbath Square London EC1R 5HL 020 7713 5722 enquiries@ces-vol.org.uk www.ces-vol.org.uk Company limited by guarantee Registered office 4 Coldbath Square, London EC1R 5HL Registered in England and Wales number 2510318 Registered charity number 803602
The Performance Hub is a partnership. Charities Evaluation Services (CES) is the accountable body. CES and the National Council for Voluntary Organisations (NCVO) are joint lead partners. See www.performancehub.org.uk if you would like more information on the work of the Performance Hub. Copyright Unless otherwise indicated, no part of this publication may be stored in a retrievable system or reproduced in any form without prior written permission from CES. CES will give sympathetic consideration to
Introduction
Contents
Introduction
What is benchmarking? When is benchmarking appropriate? What are the benefits of benchmarking?
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Getting started
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3 3 4
1. Getting started
1.1 1.2 1.3 1.4 1.5 1.6 Clarifying the aim Choosing the topic Deciding who to involve from your own organisation Clarifying timescales and costs Finding partner organisations to benchmark with Establishing the ground-rules
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6 7 8 8 9 11
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Gathering the information
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14 15 17
3
Sharing the information with others
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18 19 20
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Using the information
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Summary and further information
Introduction
Benchmarking involves comparing the practices, procedures and performance of one organisation with those of another. It can provide a great opportunity to share good practice and solutions to common issues or problems, helping you to avoid re-inventing the wheel and move quickly to an effective solution.
As such, it can be a cheap and effective tool for organisational learning and development. Benchmarking can also give you the confidence to make changes to your organisation, celebrate what is already working well, build collaborative relationships with other organisations and ultimately, help you to find out how to achieve more as an organisation. Although benchmarking is widely used in both the private and public sectors, there is currently relatively little guidance available to third sector organisations on how they can get started with benchmarking. As a result, the Performance Hub, in conjunction with Agenda Consulting, has developed these guidelines to provide a simple step-by-step guide on how to conduct a benchmarking exercise. The suggestions and advice given in these guidelines builds on the learning from research commissioned by the Performance Hub in 20061. Several quotes from those who took part in this research are included, providing useful tips and suggestions from those who have experienced benchmarking first hand.
What is benchmarking?
There are many different approaches to benchmarking. In its simplest form, it can consist of two people meeting at an event and discussing the way their organisations market their services or recruit staff, and then using this knowledge to improve these processes in their organisation. This approach can be a quick and easy method of learning about good practice and sharing solutions to common problems, but developing this concept into a slightly more structured process can lead to greater benefits for the organisations involved. In a structured process, the organisations could:
The research report Benchmarking in the Third Sector is available online via www.performancehub.org
Introduction
Stage 1
Agree on the areas which would benefit most from comparison with others, and which organisation/s to benchmark with
1
Getting started
Stage 2
Gather appropriate information about current performance or practices
Stage 3
Share this information with each other and reflect on any similarities and differences which are highlighted
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Gathering the information
Stage 4
Decide how to make improvements in their own organisation
A benchmarking exercise could involve a large number of organisations; in fact there are several sector-wide initiatives in which hundreds of organisations take part. In this type of exercise, each organisation compares itself with the average across a wide range of organisations in a particular sector, or sub-sector. (Details about largescale initiatives currently taking place in the third sector are given in Appendix B). However, the focus of these guidelines is to illustrate the relatively simple, yet structured, four-stage process outlined above. This process is likely to involve a small group of organisations, perhaps only two or three, which come together with the aim of sharing information in order to learn and improve. This type of small-scale benchmarking exercise will be relatively quick and easy to set up, and be relevant to a wide range of organisations, including even very small organisations or groups.
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Sharing the information with others
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Using the information
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Summary and further information
A SWOT analysis helps an organisation to think through its strengths (S) and weaknesses (W), as well as the opportunities (O) and threats (T) that it may be facing. Its often used as part of a strategic planning process. For more information and tips on strategic planning, see the Performance Hubs website at www.performancehub.org.uk/thinkahead
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Potentially any aspect of your organisation could be benchmarked, be it policies and procedures (e.g. expenses policy), processes (e.g. how you manage invoices or deal with enquiries) or perhaps even the changes or benefits (or outcomes) for your users which you bring about. Once you start to think about benchmarking, you may find that there are lots of organisational issues that it would be useful or interesting for you to compare with other organisations. However, it is important to keep the benchmarking exercise focused. If you try to include too many elements the exercise could become unwieldy and difficult to manage. You may need to prioritise and decide which is most important for you to learn how to improve. Spend some time thinking about how you will use the information you will gain from the benchmarking process and only include what will really be useful for you and the other organisations involved.
cheap process for organisations, requiring little time and resources to make significant progress (although you will need to invest some time in the exercise to ensure you get the most from it). If you have identified an area for improvement but dont know how to make things better, finding out how others do it can provide new ideas or different perspectives that can help you find a way forward.
Julie Smith, Social Enterprise Works
Gaining confidence about making changes You might be considering a new way of doing things, be it a new way of running a particular service, or a new internal process or procedure, but are concerned about how to implement it and whether it will work. If so, discussing the idea with another organisation which has gone through a similar process of change can help you to avoid pitfalls, reduce risks, and gain the confidence to move forward. By involving your staff in this process, you can help to create a learning environment in your organisation, where people may be more open to the possibility of change and development. [The benchmarking exercise] addressed issues I have been wanting to tackle for some time. It gave me some facts to show my colleagues to prove that we deliver value for money.
David Oldham, Papworth Trust
Introduction
Celebrating whats already working well We are not always good at acknowledging our successes, or even being aware of what we are doing well. A benchmarking exercise can highlight these and allow you to celebrate and communicate your successes and achievements. I appreciated the opportunity to gain a clear picture of how we are doing. It was reassuring to find out that we arent doing too badly!
Clare Fielden, HR Manager, Birmingham Voluntary Service Council
[The benchmarking exercise] proved very useful with lots of information I have distilled into key priorities.
Ken Guy, Soil Association
1
Getting started
[Benchmarking] has helped to confirm our views about the size and strength of our finance team compared with other charities, supporting our intention to recruit more staff an excellent exercise.
John Grint, The Childrens Trust
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Gathering the information
Building relationships with other organisations Through collaborating on a benchmarking exercise, you may gain valuable contacts and build useful relationships with the other organisations involved which could lead to further collaboration or partnership working in the future. Finding out how to achieve more Benchmarking can open your eyes to your organisations potential by finding out how others have developed and grown. It can help you to become more ambitious as an organisation, and build momentum and commitment to this among staff, users and other stakeholders.
Now that weve looked at what benchmarking is, when it might be appropriate and what some of the key benefits are, the remainder of these guidelines will take you through the four key stages of a simple benchmarking exercise: 1. Getting started 2. Gathering the information 3. Sharing the information with others 4. Using the information
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Sharing the information with others
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Using the information
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Summary and further information
1. Getting started
There are several factors it is important to think through at the very beginning of a benchmarking exercise, such as who to involve in the process and how long you are going to spend on it. This section takes you through each of these issues and discusses the potential options.
1.1 Clarifying the aim
It can be helpful to start by deciding what you want to achieve through the benchmarking exercise and making sure that everyone involved is clear about this aim. Thinking through how you will use the information youll be gathering in order to learn and improve can help you decide which areas to include within the exercise. Bear in mind that you may need to come back and review the aim of the exercise later on (for example, when you have invited other organisations to participate). Being clear from the start about the aim of the exercise can also help explain why you are doing it to staff, volunteers, users, trustees and others involved in the organisation, who may have concerns about its purpose and any changes that might happen as a result. Spend some time thinking about who might be affected by the benchmarking exercise or who may have concerns about it. Staff may feel concerned that their individual performance will be judged in some way through the process, for example. Be as open as possible with staff about how and why you are undertaking a benchmarking exercise and consider how best to allay any concerns they may have (see also section 1.3 Who to involve). It is also important to consider whether this is the right time for your organisation to undertake a benchmarking exercise. To gain the most from the exercise your organisation will need to be prepared to implement changes which are recommended as a result. This means having a culture which is open to the possibility of change, as well as the time and resources to implement it.3 Benchmarking is a valuable exercise for any organisation: size doesnt matter but stability in terms of mission, project development, etc is vital. There must be good administration in place too, in order to effect any changes as a result of benchmarking.
Lorna Stevens, Iver Educational Trust
The change section of the Performance Hub website has more tips and advice on implementing and managing change in your organisation, which can be found under introducing performance or by typing change in the search function.
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Introduction
that you are benchmarking the most appropriate area. It can be helpful to think about your organisation in terms of the Programme Logic Model. This model (shown below) divides different elements of an organisation into four related categories, and demonstrates the relationship between these. Use the Programme Logic Model to clarify which aspects of your organisation you want to include in a benchmarking exercise. Some examples of the areas within each element that you may want to consider are given below:
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Getting started
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Gathering the information
Inputs The people, money, materials and other resources which are put into a project or organisation
Activities The internal processes or activities through which the inputs are used
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Sharing the information with others
Inputs Staff/volunteer recruitment e.g. costs, time taken, marketing Staff salaries Office/premises costs Activities Staff/volunteer induction procedures/ terms of employment ICT or administration systems/procedures Communications or marketing processes e.g. costs, materials produced
Outputs Type and range of services e.g. number of calls to a helpline, range of types of caller to a helpline, number and type of drop-in sessions run Outcomes Changes or benefits that result from your outputs e.g. increase in confidence, skills or knowledge Once you have decided which topic or area of your work to focus on, you can review the aim of the benchmarking exercise and make sure that the information you plan to gather will help fulfil it.
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Using the information
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Summary and further information
The Performance Hub has produced a report on building relationships with funders on performance improvement entitled Funding Better Performance which is available from the Performance Hub website www.performancehub.org.uk
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Introduction
work in a different sub-sector, or even a different sector (public or private sector organisations), who may have valuable suggestions or innovative ways of doing things which you could learn from. Large organisations could benchmark with small organisations: the larger organisation could benefit from the experiences and knowledge of those working at a more local or grassroots level, and the smaller organisation could benefit from the broader knowledge and experience of a larger organisation. You could also consider benchmarking between different departments within your own organisation. It is helpful to decide how similar the partners in your benchmarking exercise need to be. Do they need to be a membership-based organisation? Or provide a certain type of service to their users/clients? This can help to broaden the number and range of organisations you might consider partnering with in the exercise, making it easier to find someone to benchmark with. You will also need to spend some time considering how many organisations to benchmark with. Bear in mind that it is possible that one or more organisations may drop out of the process before it is completed. This could be for any number of reasons, for example something unexpected may happen which takes their focus away from the benchmarking exercise. This may also depend on: The benefits individual organisations expect to gain The amount of time and other costs involved
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Getting started
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Gathering the information
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Sharing the information with others
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Using the information
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Summary and further information
The Performance Hubs website (www.performancehub.org.uk/supportfinder) provides a free database of organisations who provide support and advice to third sector organisations. You may want to consider approaching one of these organisations to benchmark with, or they may be able to suggest other organisations they know of who may be appropriate for you to approach as a benchmarking partner. You will find the Support Finder under the Getting Support section of the website.
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A small charity relying on volunteers, Iver Education Trust wanted to find out how other organisations recruited and retained volunteers to improve its own recruitment and retention rates. They found that an informal benchmarking exercise, started by making enquiries at an event and carried out through visits, helped them learn some valuable lessons which helped them to address a specific issue. While networking at a conference, a member of staff asked around to find people who would be interested in benchmarking, and had a good response including representatives of large national charities and some organisations outside the third sector. Choosing to work with a hospice and police force, they conducted their benchmarking exercise through visits. Iver found that organisations of different sizes experienced challenges and issues they experienced in relation to volunteering. They learned some valuable lessons about word of mouth advertising, and the value of appreciation to retention. Benchmarking also reassured them that they were good at valuing volunteers, and their partners picked up on some of their techniques. The exercise was also seen as a good way of building relationships with other organisations. .. Approaching the organisations When you have decided which organisations you would like to benchmark with, be prepared when approaching them to: Explain to them what benchmarking is and what it involves Suggest how their organisation might benefit from the exercise The introductory section What are the benefits of benchmarking? and the case studies/examples throughout the guidelines should help you do this.
You may also need to be prepared to discuss: Ways of dealing with confidentiality issues or potential conflicts of interest (see section 1.6) Likely timescales and costs of the exercise If an organisation seems reluctant to be involved, try to find out what their concerns are and see if there is a way to address them. If they are concerned about the costs or timescales involved, for example, you could suggest ways to keep them to a minimum, perhaps by offering to take responsibility for arranging meetings etc. If they are still unable to take part, they may be able to suggest other organisations which may be interested. Social Enterprise Works chose to focus on customer relationship management as its topic. Julie Smith, Performance Improvement Adviser at Social Enterprise Works, said: We had already identified that we wanted to improve our client management system after a self assessment process using the Excellence Model. We then identified organisations to partner with that had similar client processes. Initially I contacted each one to find out whether their processes were similar and asked whether they would be interested in sharing the information, nearly all agreed to be our benchmarking partners. We then designed a set of questions about each stage of the process we wanted to improve.
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Introduction Introduction
.. Codes of conduct Another way of overcoming concerns about confidentiality or conflicts of interest is to agree on a code of conduct. This is a written or verbal agreement about how the benchmarking exercise is going to be conducted. Below are some suggested criteria you might like to consider: The purpose or aims of the exercise Who will be able to see the information to be shared Will it be limited to the people involved in the exercise, others within their organisations, or shared more widely? Any areas where there is a potential conflict of interest, and will therefore not be included in the exercise Process to be followed Such as at what stage a visit or face-to-face meeting might take place Timescales and deadlines Behaviour and attitudes of those involved Such as mutual respect, trust and openness Responsibilities of each organisation/ individual Outputs of the process Such as a report or other final document A basic code of conduct is given overleaf which you may find useful when drawing up your own. Remember that each benchmarking partnership is different and the suggestions may not be relevant in your situation.
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Getting Getting started started
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Gathering the Gathering the information information
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Sharing the information information with others with others
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Using the Using the information information
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Summary and further and further information information
Introduction
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Confidentiality We will treat all information received as confidential We will not share partner organisations information with other organisations We will agree how the results of the exercise can be used with all partners Partner organisations participation in the exercise is confidential, not just the information exchanged If unattributed, the information gathered will be made anonymous by the facilitator of the exercise before being shared with partners
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Gathering the information
Checklist 1. What do you want to achieve for your organisation through the benchmarking exercise?
2. Which specific areas of your organisation are you going to include? 3. Who is going to be involved in this exercise from your organisation? How and when will they be involved? 4. What are the likely costs and timescales? 5. How similar do the organisations youre going to benchmark with need to be? 6. What sort of organisation would you learn from the most? 7. What sort of organisations would learn most from you? 8. Which organisations are you going to approach? 9. How are you going to approach them? Do you want to advertise for benchmarking partners or do you want to approach potential benchmarking partners directly? 10. What sorts of conflict of interest might there be? How might you overcome these? 11. Do you want to use a code of conduct or have some other written agreement about how the data will be used and how you will overcome potential difficulties with confidentiality?
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Using the information
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Summary and further information
Introduction
Closed questions These are questions which can be answered with a single word or phrase, such as do you hold inductions for your volunteers? They are usually relatively quick and easy to answer, so it can be good to use them at the beginning of a questionnaire or to get some specific information about an issue, before you explore it in more depth with an open question. It can be a good idea to allow space underneath a closed question for the respondent to write any comments which relate to their answer. Scales These can take several different forms, such as: strongly agree agree disagree strongly disagree always sometimes rarely never very useful quite useful not very useful not at all useful If you are using scales, make sure that you have an equal number of positive and negative options. Also make sure that you are clear about what each point on the scale represents (e.g. how often is sometimes?). Also consider whether or not you want to allow a middle option which is neither positive nor negative. If you are using numerical scales (1-10, 10 20 etc), also make sure that you avoid any cross-over in the options given (e.g. in the example just given, if the answer was 10, which bracket do they fall in?). Multi-choice questions These can make it easier to analyse the answers as everyone has to choose from the available options. It is then easy to say what the average answer was, for example. However, this also limits the amount of detail you get and forces the respondent to choose the option which best describes them even if it isnt quite appropriate.
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Getting started
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Gathering the information
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Sharing the information with others
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Using the information
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Summary and further information
It is usually best to include a range of different types of question, depending on the type of information you want. It can be easy to become fixated on one type of question, but make sure that the type of response you are asking for is really relevant to the question being posed. Will the answers give you the type of information you need to really make use of the information given? Spend some time thinking about how you are going to use the information when you are setting the questions to make sure you are asking the right questions and in the right way to give you the most useful information possible. Think carefully about the structure and order of the questions to ensure there is a logical flow and that all questions related to a certain topic are grouped together. Sometimes it can help to have the easiest questions to respond to at the beginning of the questionnaire because a very difficult question can be off-putting. Ensure that the wording of the questions is clear and unambiguous. Could another organisation interpret a question in a different way? For example, membership rate could refer to the number of new members an organisation recruits in a year, the number of members renewing their membership during this time, or as the cost of membership. Also, when using a written questionnaire, make sure that the font is an appropriate size and the questions are spaced out well, with clear headings.
Avoid leading questions where possible e.g. do you agree that its a good idea to have inductions for volunteers? This implies that you think it is a good idea to hold inductions for volunteers and want the respondent to agree with you. More accurate, and therefore more useful, information could be gained by asking do you have inductions for volunteers?, along with some further questions about what these inductions involve and what they feel are the pros and cons of having them. Include instructions. When using a questionnaire, it can be helpful to include a title and introduction at the beginning, along with instructions on how to answer specific questions. You may also want to include the date by which you want the questionnaire returned and the address which is should be returned to. Do you also want to know who filled in the questionnaire and when? Test out the questions first. If you are planning to use the questions with a number of organisations, perhaps try it out first on one or two organisations to make sure that the information you get back is what you hoped for. If you decide to use a questionnaire you can either send it to the other organisations involved or you may find it easier to use an online survey tool such as SurveyMonkey (see www.surveymonkey.com) By sending out a questionnaire by email, I was able to reach more partners than I could have afforded to visit.
Philip Underdown, Change
Introduction
Remember, it is possible that not all organisations involved in the benchmarking exercise up to this stage will complete the questionnaire. Unexpected things may have occurred which will divert their attention and resources to something else. Having thought through this section, you are ready to move on to stage three: sharing the information with others. As before, you may find it helpful to go through this checklist before you move forward:
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Getting started
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Gathering the information
1. Have you decided exactly which information you are going to gather and share? 2. Have you explained any jargon to your benchmarking partners? 3. Have you thought about how you are going to use the information afterwards? 4. How much of this information do you already have to hand, and how much will need to be collected? What implications does this have for the likely timescales and costs involved? 5. Have you written the information to be collected in the form of a set of questions? If so, have you thought carefully about how to word these questions and chose the appropriate type of question for each piece of information? 6. Have you tested out the questions to make sure that they lead to the most useful information for you?
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Sharing the information with others
7. Have you set a date for sharing the information with your benchmarking partners? 8. Who is going to make sure this process keeps on track? 9. Do you need a review date to check that everyone is still on track to complete the information gathering on time?
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Summary and further information
Organisation A How do you deliver your advice services? Average number of users seen per month Number of cancellations / no shows per month Average length per appointment Average number of times each client is seen What do you do to support/encourage your clients to apply for jobs? Via individual appointments 20 20 1 hr 3 We have a database of local employment agencies on our website
24 0-1 2-3 hrs 10 We meet regularly with several local businesses to discuss potential opportunities and arrange work placements
Introduction
Organisation A Percentage of users who are happy or very happy with your services Percentage of users who are happy or very happy with your services Percentage of clients applying for at least one job within six months of using your services Percentage of clients offered a job within a year of using your services Approx. cost per user (annual turnover divided by annual number of users) What are your criteria for deciding who to offer your services to?
Organisation B
Organisation C
72%
61%
70%
Getting started
70%
49%
82%
15%
20%
84%
4%
Unknown
40%
666
762
2700
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Sharing the information with others
Must be an exoffender
users appear to feel less confident about getting a job after using their service (compared to the users of Organisations A and C) is not collecting data on the number of users who go on to gain employment Organisation C: provides the closest links to potential employers has the highest percentage of users who go on to apply for and gain employment is the most expensive per user
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Using the information
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Summary and further information
User satisfaction levels are similar across all three organisations, and they all differ in the criteria they set for who can access their services. .. Understanding why differences have occurred Once you have identified the key similarities and differences between your data and those of your benchmarking partners, it is important to spend some time thinking through why these differences may have occurred. There may be very good reasons for these differences and they do not necessarily imply that any of the organisations need to change the way they are doing things. In the above example, Organisation A has a higher number of cancellations/no shows than Organisation C. Could this be due to the nature of the clients they are working with? Might the users of Organisation C be leading less chaotic lives than those using Organisation A? Organisation B sees more users per month than the other two organisations. Might this be because they see their users for less time per appointment? Their users are also less confident about applying for jobs than the other two organisations. Could this be because they have spent less time with each client or because of another factor? Organisation C has the highest number of users going on to gain employment. Might this be because of the criteria they set for who can access their services and the application procedure involved? Their service is also the most expensive per user why might this be the case?
It is important to avoid making assumptions about why differences have occurred. As you can see, an initial analysis of the results of a benchmarking exercise may raise further questions which need to be answered before any recommendations for change can be made. If this is the case, it can be helpful to follow up the initial results of a benchmarking exercise with a phone call or visit to one or more of the organisations involved.
0
Introduction
You are now ready to move on to stage four: using the information. As in the previous stages, the questions below might help you ensure you have thought through everything you need to before you do. Checklist 1. Have you analysed the data to check for similarities and differences between your organisation and your benchmarking partners? 2. Have you spent some time considering why any differences may have occurred? 3. Do you need to find out more information from your benchmarking partners, perhaps via a follow-up visit with one or more of them? 4. Do you need to find out more information from within your own organisation e.g. a user satisfaction survey or focus group for staff?
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Getting started
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Gathering the information
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Sharing the information with others
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Using the information
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Summary and further information
Introduction
We summarised what we had learnt in the report and then actioned the areas that required work. As a result we have implemented some positive changes and are also in the process of working on other areas of change.
Claire Greenhill, Rainbow Services
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Getting started
In addition to your intended aims, you could extend the benefits by considering: How you can build on the contacts made to develop a collaborative relationship with your benchmarking partners What other aspects of your organisation might benefit from a benchmarking exercise Repeating the exercise in the future to see how each organisation has developed It can also be useful to reflect back on the process once the exercise has been completed by considering what the organisation gained as a result and whether the aim was achieved. You may also want to consider which aspects of the exercise worked particularly well, which didnt work so well, and how you might improve it if you were to do the exercise again.
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Gathering the information
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Sharing the information with others
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Using the information
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Summary and further information
Introduction
London Benchmarking Group The London Benchmarking Group consists of more than fifty leading international corporations who have come together to manage, measure and report their involvement in the community. www.lbg-online.net ORC International: Benchmarking on customer satisfaction ORC International is an employee research organisation which runs a public sector customer satisfaction benchmarking exercise, with two long established groups: one for central government departments and agencies, and the other for housing providers. The aim of the groups is to allow organisations to put their own customer satisfaction results into context by using data from their peers. www.orc.co.uk Sayer Vincent: Benchmarking on information systems Sayer Vincent runs an annual benchmarking exercise on information systems aimed at organisations with 50 paid staff or more. www.sayervincent.co.uk/render.aspx?siteID= 1&navIDs=1,7,68
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Getting started
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Summary and further information
ISBN 978-0-9555404-3-1 Performance Hub 4 Coldbath Square London EC1R 5HL 0800 652 5787 Textphone 0800 01 88 111 (minicom) helpline@performancehub.org.uk www.performancehub.org.uk